There is an important relation between the average
cost and marginal cost curves. The relation is shown in table and in graph.
Tabular
representation
Units of
Output
|
Total Cost
|
Marginal
Cost
|
Average
cost
AC
= TC / Q
|
0
1
2
3
4
5
6
7
8
|
10
20
28
34
38
42
48
56
72
|
-
10
8
6
4
4
6
8
16
|
∞
20
14
11.3
9.5
8.4
8
8
9
|
Graphical
representation
 |
| average cost |
From the above table and graph following
observations can be made between AC and MC
